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> The El Salvador President has previously said the move will open up financial services to the 70% of Salvadoreans who do not have bank accounts. Right. Peopl
by blocked_again 5y ago
> The El Salvador President has previously said the move will open up financial services to the 70% of Salvadoreans who do not have bank accounts.
Right. People who can't even afford a bank account would now all be using financial services by paying 10 dollars per transaction.
- atatatat 5y agoShortsighted. If you make one legal tender, suddenly they all are more useful there. Doge transactions outside of their system for small things, their corpo BTC chain for larger things? Maybe.
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- vbezhenar 5y agoThey're using Lightning network which provides almost free transactions.
- doomroot 5y agoEl Salvador is using the lightning network to facilitate transactions for the most part. They are using the work of Strike & bitcoin beach in El Salvador as an example.
- chronicsunshine 5y agoThey are using them? The country has a population of >6 million. Bitcoin beach is a philanthropy run by one adult coordinator, 4 university students and 4 high school students. The country is not using the lightning network. Maybe some have intentions for them to. But this is not something widely used by any means. ref: https://www.bitcoinbeach.com/ https://www.bitcoinbeach.com/
- X6S1x6Okd1st 5y agoThe narrative is that they'd use the lightning network
- spottybanana 5y agoWhat the normal people will use in the beginning is going to be non-custodial LN based solution like strike. Minimal fees, easy to use. If you get a bit more, move to custodial LN wallet/onchain transactions. More fees, more security and less trust. And once you have too much BTC start storing them in an offline cold storage.
- jasonlaramburu 5y agoLN still requires periodic on-chain transactions to close and open payment channels. So either these costs are being passed along to the users in El Salvador or the wallet provider is subsidizing it.
- random_kris 5y agoI run 1 node and in a year I haven't yet had to reopen an existing channel. And 3 channels are good enough for most
- jasonlaramburu 5y agoAre you buying daily essentials using LN, or running a small business? Also how could someone in El Salvador run a node without reliable electricity and internet? Also remember that the hardware cost of a full node is likely more than a month’s wages.
- gruez 5y ago>Also how could someone in El Salvador run a node without reliable electricity and internet? A lightning node doesn't need to be on 24/7. To prevent your counterparty from stealing your funds you only need to be online every 2 weeks (or never if you use a watchtower service). Syncing is also fast, so 1 hour of internet access/electricity should allow you to catch up 2 weeks of blockchain history. >Also remember that the hardware cost of a full node is likely more than a month’s wages. Are there no thin wallets for lightning?
- Cantinflas 5y agoDoubt they will be using the Bitcoin blockchain, likely a custodial wallet powered by a normal database. Like paying with your coinbase account to another one
- varispeed 5y agoThe poor always pay more than wealthy for services. E.g. if you have a poor credit history you are unlikely to get the same rate as someone who doesn't
- kwhitefoot 5y agoWhere I live ordinary bank transactions are free for ordinary consumers. I never pay a transaction fee or any annual fees. My bank used to charge an annual fee for a credit card but they have stopped charging now. In fact in my whole life (I'm 65 so about 50 years of having bank accounts) I have never paid transaction fees for ordinary transactions (in the UK and Norway).
- StavrosK 5y agoGreece here, transactions cost 3 EUR. I think they're possibly free if you use the same bank, but the apps are cumbersome to use and the potential for fees is a deterrent, so nobody uses them for transactions of less than hundreds of EUR.
- hiq 5y ago> Greece here, transactions cost 3 EUR. You mean that a transfer from your Greek bank account to another Greek bank account would cost you 3 EUR? What happens if you get a bank account in another EU / SEPA country (e.g. via n26) and use it instead of a Greek bank account? Would there be any downside? Would a Greek company paying you a salary refuse to transfer the money there rather than a Greek bank account?
- StavrosK 5y ago> You mean that a transfer from your Greek bank account to another Greek bank account would cost you 3 EUR? Yep! Sad. > What happens if you get a bank account in another EU / SEPA country (e.g. via n26) and use it instead of a Greek bank account? Would there be any downside? Would a Greek company paying you a salary refuse to transfer the money there rather than a Greek bank account? No, transferring money to N26/Revolut is free (well, minus whatever fee the Greek bank will charge, which I think will be 3 EUR), but receiving money from N26 gets a 3 EUR fee again...
- hiq 5y ago> receiving money from N26 gets a 3 EUR fee again If the payee has a Greek bank account I suppose? But then it means that if both payer and payee have a n26 bank account and use it in Greece, they don't have to pay this fee anymore, right? So why would they use Greek banks? I just don't see how this 3 EUR fee still exists given the current competition.
- jbverschoor 5y agoIt's not about "affording". Banks outright refuse people, businesses etc.
- KingOfCoders 5y agoThen it's easier to give everyone the right to a bank account than introduce a new payment infrastructure.
- jbverschoor 5y agoBanks are free to accept, reject, or kick people. Not just there. Also here. Banks, PayPal, all the same shit in terms of exclusion and power imbalance
- KingOfCoders 5y agoIf everyone has the right to a bank account, bank cant't reject or kick people.
- jbverschoor 5y agoThis already is the case in the Netherlands. Don’t you understand? The system is broken
- KingOfCoders 5y agoNo I don't understand.
- jbverschoor 5y agoHere in NL, everybody is "entitled" to a bank account. However, banks can, and do, freely reject people. They will block and ban your account if they want to. For businesses it's even worse. So even if everybody has the right to have a bank account, it just doesn't work like that.
- BTCOG 5y agoThey are using Zap/Strike (Lightning) and zero fees. The phony "fees are $1,000 a tx line" and $10 hyperbole simply show you have no clue what you're talking about when speaking about Bitcoin. Even on chain the past solid week you could send free BTC transactions, or for a couple of cents.
- blocked_again 5y agoI am sorry but what is the point of adopting BTC if vast majority of the transactions are going to be handled by a third party service. Makes no sense to me.
- rawtxapp 5y agoStrike is just one player in the lightning space, there are many other alternatives [1] (Phoenix is an easy to use non-custodial one). 1: https://lightningnetworkstores.com/wallets https://lightningnetworkstores.com/wallets
- arthurcolle 5y ago"Why even have friends when I need to have a bunch of them? Makes no sense to me"
- deif 5y agoBecause it's a global currency not reliant on the US dollar? Not everything is about perfect decentralisation too, third parties can run decentralised infrastructure so it's verifiable by users of the network.
- pinkybanana 5y agoThe point of adopting BTC is generally to get wealthier. Merchants accept BTC to have more customers, more revenue and ultimately more profit. As I have witnessed it, there has been increasing adoption of BTC slowly but surely. In El Salvador however now they have to accept BTC because the government mandates that. Whether that makes sense or not, I don't know, but it is happening in any case.
- beaner 5y ago
- ricardobayes 5y agoOf course, but bitcoin was never meant to be 'banking for the underbanked'.
- runbathtime 5y agoNot the unbanked population that most think of when they hear about the unbanked. It is meant more for people that are ousted from banking or traditional payments, like pornhub or Trump, or Loomer.
- seaman1921 5y agolmaoo..
- runbathtime 5y agoThe main benefit from this that I can see is that El Salvador will attract bitcoin businesses with a lot of money and other bitcoin whales who might move there and start businesses, employing locals and injecting money into the El Salvador economy. The average person isn't going to use bitcoin and the average merchant will likely never be paid in it.
- arenaninja 5y agoThis is hopefully the plan. As a Salvadorean living in the US it would worry me otherwise
- carloseduardov 5y agoI am salvadoran myself and I do not support the current president but I should say that the law passed by congress says that El Salvador will have it's own bitcoin reserve and an exchange for bitcoin against USD (our current national currency), so there will NOT be a transaction fee involved as you are just moving within a national reserve with a national exchange.
- Sebb767 5y ago> so there will NOT be a transaction fee involved as you are just moving within a national reserve with a national exchange. For buying and selling Bitcoin, possibly. Transactions with Bitcoin will still have the usual transaction fees, as you still need to pay the miners verifying/realizing them.
- rawtxapp 5y agoThey are using lightning network which allows almost instant and practically free Bitcoin payments.
- blocked_again 5y agoAsking as a noob, isn't the whole point of transaction fees to prevent malicious actors from flooding the network with spam. How does lighting networks prevent that from happening and why can't one use a smiliar approach for the actual bitcoin blockchain?
- rawtxapp 5y agoThe blockchain settles the transaction and records the finality. Imagine a transaction as being a simple cryptographic signed message that sends 1 BTC to someone, you just broadcast it to the network and it gets recorded immediately. But if you expect to continue transacting with the same person, instead of broadcasting the transaction, you can hold on to it and keep iterating on top of it with new balances, each time signing the transaction so that your counterparty can always go to blockchain to claim their coins. There's obviously some mechanism to avoid broadcasting old state and making sure you actually have the funds, etc, but you can't flood the network, even if you tried, you'd only be flooding your immediate neighbor which still charges fees, but much smaller fees than the blockchain. There's also mechanism for connecting those channels, so you don't need to have a direct channel with someone you want to pay, you just need a path to them.
- kragen 5y agoEven without Lightning, it's not US$10 per transaction; I commented in more detail at https://news.ycombinator.com/item?id=27448744 https://news.ycombinator.com/item?id=27448744.
- ddtaylor 5y agoSometimes it's lower, sometimes it's much higher. Usually the more people that are using the blockchain the higher the fees. Bitcoin right now mostly follows a trend where it gains in popularity, which causes a surge in transactions, which causes fees to go up, which in turn causes people to stop using it, etc.
- UncleMeat 5y agoIt varies over time. But I think everybody agrees that if BTC takes over the world then the transaction fee will be much much higher.
- wickoff 5y agoLow on-chain fees are actually a disaster for Bitcoin. Once mining rewards dwindle to nothing due to halvings fees would have to rise astronomically to maintain hash power.
- javert 5y agoIf bitcoin becomes the world currency, nation states can mine in order to protect the system. I think an equilibrium would be reached. For example, the US is probably OK with Russia having 10% of hash power if the US has 10%, and so on. However, that particular example may be unrealistic, because the US would probably choose poverty over accepting bitcoin.
- warkdarrior 5y ago> If bitcoin becomes the world currency, nation states can mine in order to protect the system. That sounds truly decentralized. /s
- whoisninja 5y agoliving in a priviliged bubble, can't even open a website to check Bitcoin fees and what lightning network is. why strike is #1 app in their country. main chain fees is $1 right now, and lightning tx are almost free: https://mempool.space/ https://mempool.space/
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- joelbondurant 5y agoThese are the high powered brains who think the Federal Reserve is processing coffee payments.
- ranci 5y agoThey'll eventually use lightning network.
- Trufa 5y agoThis is plain wrong. I don't know why it is upvoted to the top.
- crazypython 5y agoRight now, doing a Bitcoin transaction costs $0.97, so it's already false. If you are willing to wait ~48 hours for confirmation, it can cost as little as $0.15.[0] Furthermore, the system in question is not Layer 1 Bitcoin, but Layer 2 Lightning. To use Lightning, one must perform a Bitcoin transaction to open a channel– akin to opening a bank account– which provides access to the entire lightning network. I find opening a bank account for less than a dollar very attractive. That being said, layer 2 fees exist as well– you must pay someone, usually a hub, to securely lock some amount of Bitcoin to a channel so that you may transact. (Note that the secure lock isn't a security deposit; a channel be closed with funds returned without any third-party trust.) [0]: https://mempool.space/ https://mempool.space/
- ulzeraj 5y agoCorrect me if I'm wrong but I heard Strike and Bitcoin Beach Wallet use Lightning and that network makes the fees to drop bellow 1 cent.
- SkyMarshal 5y agoBefore they can even pay $10 per transaction, they need to buy Bitcoins first. The problem of the unbanked isn’t that they don’t have access to financial services, it’s that they don’t have enough money. They live paycheck-to-check, if that. There’s no point in converting what little they have to Bitcoin and paying fees on the conversion, and then more fees when spending it.
- ryan29 5y agoIt's fees all the way down. I'm not even joking. I wanted to buy an ENS domain last week, so I put $100 CAD into an exchange (~$80USD). I abandoned the attempt because, after the fees to transfer out of the exchange to a private wallet and the fees to actually make the transaction on the blockchain, I wasn't sure if I'd have enough money. That's $80 to buy something that's supposed to be $5. I couldn't even figure out how to figure out what the damn thing would actually cost in the end.
- divs1210 5y agoSalvadoreans have the Strike [0] app available to them, on which payments are practically instant and free. [0] https://finance.yahoo.com/news/strike-launches-bitcoin-lightning-payment-170053650.html https://finance.yahoo.com/news/strike-launches-bitcoin-light...
- dheera 5y agoThe bigger concern might be that Bitcoin offers zero privacy; anyone you pay with Bitcoin can know exactly how much you have in your account, which is a huge personal security risk, possibly especially so in El Salvador. If people use Bitcoin to store their life savings instead of banks, expect gangs to run around robbing people for their bitcoin because all it takes is one unscrupulous vendor to inform the gangs of your net worth.
- kerng 5y ago>> by paying 10 dollars per transaction I really wish comments would be more focused on telling the whole story rather than focusing on outdated information. Lightning transactions are cheap and fast - so this argument is misinformed. A core reason for El Salvador to adopt Bitcoin might be related to remittance - big part of their GDP is based on remittance and this will save people money. Source: https://data.worldbank.org/indicator/BX.TRF.PWKR.DT.GD.ZS?locations=SV https://data.worldbank.org/indicator/BX.TRF.PWKR.DT.GD.ZS?lo...
- Solvitieg 5y agoWhy intentionally spread misinformation? Fees are currently $1.17 and were as low as $0.30 recently. https://mempool.space/ https://mempool.space/